A better future

Wiley Reports Third Quarter Fiscal Year 2017 Results

Third quarter revenue of $436.5 million, up 3% over prior year on a constant currency basis (flat on a US GAAP basis) primarily due to the impact of shifting to time-based journal subscriptions (+$29M)

Third quarter journal subscription revenue up 23% on a constant currency basis (+19% US GAAP) primarily due to the impact of shifting to time-based journal subscriptions (+$29M); excluding the impact of the subscription shift and currency, journal subscription revenue was even

Third quarter adjusted EPS of $0.92, up 37% on a constant currency basis primarily due to shift to time-based subscriptions (+$0.33). Adjusted EPS excludes certain charges and credits further described below and in the attached financial schedules. EPS on a US GAAP basis was $0.82.

Four new university Online Program Management partners signed – George Mason (VA), Seton Hall (NJ), St. John’s (NY), and Vlerick (Belgium); 19 new programs

Reaffirming full-year outlook of mid-single digit decline in adjusted EPS but revising revenue guidance from flat to a low-single digit decline due to market weakness for books. Both exclude the impact of foreign exchange, the shift to time-based journal subscriptions, and acquisitions

Public Company Information:

NYSE:

JWA

NYSE:

JWB

"cash flow from operating activities, less composition and other capital spending"

HOBOKEN, N.J.--(BUSINESS WIRE)--John Wiley & Sons, Inc. (NYSE:JWa)(NYSE:JWb), a global research and
learning company, today announced the following results for the third
quarter of fiscal year 2017, ending January 31:

% Change

$ millions

FY17

FY16

Excluding FX

Including FX

Revenue:

Q3

$436.5

$436.4

3%

0%

Nine Months

$1,266.3

$1,292.7

1%

(2%)

GAAP EPS:

Q3

$0.82

$0.61

34%

Nine Months

$1.15

$1.90

(39%)

Adjusted EPS:

Q3

$0.92

$0.67

37%

37%

Nine Months

$2.18

$2.04

9%

7%

Adjusted EPS exclude tax charges and credits, restructuring
charges and credits, and pension settlement as more fully
described in the attached financial schedules.

Management Commentary

“Results were mixed this quarter,” said Mark Allin, Wiley’s President
and CEO. “Research revenue and earnings were fully in line with our
expectations, with steady performance from journal subscriptions and
double-digit growth from author-funded access. The Solutions business
continued to post double-digit revenue growth and very strong profit
improvement. We are encouraged by the momentum in the Online Program
Management business, with four new partners and nineteen new programs.
Publishing revenue showed a significant decline due to market weakness
in Books and Reference Material, particularly print.”

Fiscal Year 2017 Outlook

Wiley is reaffirming its fiscal year 2017 operational outlook of
mid-single digit decline in adjusted EPS and lowering its operational
revenue outlook from flat to a low-single digit decline due to further
weakness in print book markets. Operationally speaking, revenue and
adjusted EPS for the nine months were down 3% and 6%, respectively.
Note, the adjusted full year outlook excludes foreign exchange, the
favorable impact from shifting to time-based journal subscription
agreements (+$34 million in revenue and +$0.38 in EPS), and the partial
year revenue contribution (approximately +$20 million) and EPS dilution
(approximately -$0.10) of recent acquisitions. Also note, the fiscal
year 2017 impact of the shift to time-based journal agreements was
projected to be +$37 million of revenue and +$0.42 of EPS; however, due
to the prolonged weakness in the British Pound, the FY17 impact has
lowered to+$34 million and +0.38 per share.

Foreign Exchange (FX)

Note that foreign exchange was adverse to third quarter revenue by $12.9
million, neutral to EPS and adverse to nine month revenue and adjusted
EPS by $36.8 million and $0.05, respectively. Wiley generates
approximately half of its revenue from outside the United States and is
therefore exposed to foreign exchange rate fluctuations, particularly in
relation to the euro and pound sterling. The weighted average rates for
fiscal 2016 were 1.11 and 1.50, respectively. Throughout this report,
references are made to variances “excluding foreign exchange” or “on a
constant currency basis”; such amounts exclude both currency translation
effects and transactional gains and losses.

Adjusted Results

The Company provides financial measures referred to as “adjusted”
contribution to profit and EPS, which exclude a previously announced
tax charge; restructuring charges; a pension settlement charge related
to voluntary lump sum buyouts; and certain deferred tax benefits as more
fully described in the attached financial schedules. Variances to
adjusted contribution to profit and EPS are on a constant currency basis
unless otherwise noted. Management believes the exclusion of such
items provides additional information to facilitate the analysis of
results.These non-GAAP measures are not intended to replace the
financial results reported in accordance with GAAP.

Third Quarter Summary

Third quarter revenue was flat on a US GAAP basis at $436.5
million, and increased 3% excluding the adverse impact of foreign
exchange. Higher revenueon a constant currency basis was
primarily driven by the favorable impact of the shift to time-based
subscriptions (+$29M), the contribution of the Atypon acquisition
(+$8M) and growth in Solutions (+$7M), partially offset by a continued
decline in Publishing (-$25M) and the impact of an unusually large
backfile sale in the year-ago period (-$10M). Excluding the favorable
subscription shift and the contribution from Atypon, revenue on a
constant currency base was down 5% due to the prior year backfile sale
and current period declines in book sales (-18%), which offset
double-digit growth in Solutions (+14%). Nine month revenue was down
2% on a US GAAP basis to $1,266 million, but up 1% excluding the
impact of currency.

Third quarter EPS increased 34% on a US GAAP basis to $0.82, or 37%
on an adjusted basis to $0.92. Adjusted EPS excludes restructuring
charges in the current quarter ($0.10) and prior year period ($0.16);
and a deferred tax benefit in the prior year period related to a
future tax rate reduction in the UK ($0.10). The increase in Adjusted
EPS was mainly due to the favorable impact of the shift to time-based
journal subscriptions (+$0.33) and one-time tax benefits (+$0.12),
partially offset by the impact of lower revenue in Publishing,
dilution from the Atypon and Ranku acquisitions (-$0.03), and the
impact of an unusually large backfile sale in the year-ago period
(-$0.10). Excluding the shift to time-based subscriptions and Atypon
and Ranku dilution, third quarter adjusted EPS was down 5%. Nine month
EPS was down 39% on a US GAAP basis to $1.15 primarily due to the
second quarter $0.82 one-time tax charge. Nine month adjusted EPS at
constant currency was up 9%.

Restructuring Activity: Wiley recorded a $9.1 million
restructuring charge in the quarter primarily related to the
consolidation of facilities and severance provisions related to
additional efficiency gains.

Net Debt and Cash Position: Net debt (debt less cash and cash
equivalents) at the end of January was $383.4 million compared to
$428.9 million as of January 31, 2017. Cash and cash equivalents as of
January 31, 2017 were $482.3 million.

Free Cash Flow less Composition Costs (note, this is
identical to the free cash flow metric previously reported but with a
modified label): Free Cash Flow less Composition Costs was$119.5
million for the first nine months compared to $18.9 million in the
prior year primarily due to earlier journal cash collections (timing),
but also lower tax payments and lower restructuring payments,
partially offset by higher capital spending.

Share Repurchases: Wiley repurchased 255,200 shares this
quarter at a cost of $14.1 million, an average of $55.14 per share.
Over 4 million shares remain in the current authorized repurchase
programs.

RESEARCH (JOURNALS AND ATYPON)

Revenue: Third quarter revenue of $205.8 million rose 12% on a
US GAAP basis, or 17% on a constant currency basis. Constant currency
performance was driven by the favorable impact of shifting to
time-based journal subscriptions (+$29M), the contribution from the
Atypon acquisition (+$8M), steady underlying performance from Journal
Subscriptions, and double-digit growth in author funded access (+15%),
which offset a decline in Licensing, Reprints, Backfiles, and Other
(-14%), largely as a result of the large backfile sale in the prior
year period. For the nine months, Research revenue was up 4% on a US
GAAP basis but increased 8% at constant currency primarily due to the
shift to time-based journal subscriptions (+$34M) and 4-month
contribution from Atypon (+$10M).

Contribution to Profit: Third quarter contribution to profit
(CTP) of $52.5 million was up 19% on a US GAAP basis or 17% on an
adjusted basis primarily due to the shift to time-based journal
subscriptions (+$25M CTP), which more than offset the large,
high-margin backfile sale in the prior year period; costs associated
with Atypon; higher technology costs; and other spending to support
society journals. For the first nine months, contribution to profit
was up 1% on a US GAAP basis, or 4% on an adjusted basis, including
the benefit from the shift to time-based journal subscriptions ($29M).

Calendar Year 2017 Journal Subscriptions: As of the end of
January, calendar year 2017 Journal Subscriptions were up 5% on a
constant currency basis due to earlier renewals resulting from the
introduction of database model subscriptions, which provided
library-wide access for our largest customers (note, 87% of CY17
targeted business has been contracted). Wiley expects full year
calendar year 2017 subscription growth to be about 1%.

Society Publishing Agreements: No new society contracts were
signed in the three month period; 78 were renewed/extended with
combined annual revenue of $57 million; and five contracts with annual
revenue of $0.6 million were not renewed.

PUBLISHING (BOOKS, COURSE WORKFLOW, ONLINE TEST PREPARATION)

Revenue: Third quarter revenue declined 15% on a US GAAP basis
to $171.4 million, or 13% at constant currency due to continued market
pressure on Books and Reference Material (-18%). Constant currency
growth in Online Test Preparation (+29%), Course Workflow (+7%) and
Licensing and Other (+7%) was more than offset by a 27% decline in
Education Books, which continue to be impacted by rental and other
market forces, and a 12% decline in STM and Professional Books, which
saw a continued decline in print revenue. Also note, Wiley recorded an
unusually large STM online book sale (+$4 million) in the prior year
period. For the nine months, Publishing revenue declined 13% on a US
GAAP basis, or 11% at constant currency.

Contribution to Profit: Third quarter contribution to profit
fell 18% on a US GAAP basis to $38.8 million, or 21% on an adjusted
basis. Lower profit was primarily due to the Book revenue decline,
partially offset by additional efficiency savings generated from the
Company’s restructuring program. For the nine months, contribution to
profit on both a US GAAP and adjusted basis was down 15%.

Revenue: Third quarter revenue rose 14% on both a US GAAP and
constant currency basis to $59.2 million. Growth at constant currency
was driven by Online Program Management (+15%) and Corporate Learning
(+20%). Professional Assessment grew 5%. For the nine months,
Solutions revenue was up 13% on both a US GAAP and constant currency
basis.

Contribution to Profit: Third quarter contribution to profit on
a US GAAP basis rose 105% to $3.6 million, or 137% on an adjusted
basis. Growth at constant currency was due to revenue growth and
improved operating efficiency. For the nine months, Contribution to
Profit on a US GAAP basis was $9.1 million, or $10.7 million on an
adjusted basis, as compared to $0.2 million and $0.5 million,
respectively, in the prior year period.

Online Program Management: Wiley signed four new partners in
the quarter – George Mason (VA), Seton Hall (NJ), St. John’s (NY), and
Vlerick Business School (Belgium). One non-US partnership was
cancelled. Wiley also signed 19 new programs in the quarter and
discontinued six. As of January 31, 2017, Wiley had 40 university
partners and 244 programs under contract, compared to 37 partners and
231 programs at the end of last quarter.

This release contains certain forward-looking statements concerning the
Company's operations, performance, and financial condition. Reliance
should not be placed on forward-looking statements, as actual results
may differ materially from those in any forward-looking statements. Any
such forward-looking statements are based upon a number of assumptions
and estimates that are inherently subject to uncertainties and
contingencies, many of which are beyond the control of the Company, and
are subject to change based on many important factors. Such factors
include, but are not limited to (i) the level of investment in new
technologies and products; (ii) subscriber renewal rates for the
Company's journals; (iii) the financial stability and liquidity of
journal subscription agents; (iv) the consolidation of book wholesalers
and retail accounts; (v) the market position and financial stability of
key online retailers; (vi) the seasonal nature of the Company's
educational business and the impact of the used book market; (vii)
worldwide economic and political conditions; (viii) the Company's
ability to protect its copyrights and other intellectual property
worldwide (ix) the ability of the Company to successfully integrate
acquired operations and realize expected opportunities and (x) other
factors detailed from time to time in the Company's filings with the
Securities and Exchange Commission. The Company undertakes no obligation
to update or revise any such forward-looking statements to reflect
subsequent events or circumstances.

About Wiley

Wiley is a global research and learning company. Through the Research
segment, the Company provides scientific, technical, medical, and
scholarly journals, as well as related content and services, for
academic, corporate, and government libraries, learned societies, and
individual researchers and other professionals. The Publishing
segment provides scientific (STM), professional development, and
education books and related content, as well as test preparation
services and course workflow tools, to libraries, corporations,
students, professionals, and researchers. In Solutions, Wiley
provides online program management services for higher education
institutions, and learning, development, and assessment services for
businesses and professionals.

JOHN WILEY & SONS, INC.

UNAUDITED SUMMARY OF OPERATIONS

FOR THE THIRD QUARTER AND NINE MONTHS ENDED

JANUARY 31, 2017 AND 2016

(in thousands, except per share amounts)

THIRD QUARTER ENDED JANUARY 31,

2017

2016

% Change

US GAAP

Adjustments

Adjusted

US GAAP

Adjustments

Adjusted

US GAAP

Adjusted excl. FX

Revenue

$

436,456

-

436,456

436,393

-

436,393

0

%

3

%

Costs and Expenses

Cost of Sales

116,405

-

116,405

120,215

-

120,215

-3

%

0

%

Operating and Administrative

247,278

-

247,278

250,667

-

250,667

-1

%

2

%

Restructuring Charges (A)

9,118

(9,118

)

-

13,713

(13,713

)

-

Amortization of Intangibles

12,495

-

12,495

12,179

-

12,179

3

%

8

%

Total Costs and Expenses

385,296

(9,118

)

376,178

396,774

(13,713

)

383,061

-3

%

1

%

Operating Income

51,160

9,118

60,278

39,619

13,713

53,332

29

%

14

%

Operating Margin

11.7

%

-

13.8

%

9.1

%

-

12.2

%

Interest Expense

(4,931

)

-

(4,931

)

(4,590

)

-

(4,590

)

7

%

7

%

Foreign Exchange Gain

2,118

-

2,118

1,431

-

1,431

Interest Income and Other

637

-

637

786

-

786

-19

%

-16

%

Income Before Taxes

48,984

9,118

58,102

37,246

13,713

50,959

32

%

14

%

Provision for Income Taxes (A)

1,565

3,359

4,924

1,728

10,000

11,728

-9

%

-58

%

Net Income

$

47,419

5,759

53,178

35,518

3,713

39,231

34

%

35

%

Earnings Per Share- Diluted (A)

$

0.82

0.10

0.92

0.61

0.06

0.67

34

%

37

%

Average Shares - Diluted

58,012

58,012

58,012

58,204

58,204

58,204

NINE MONTHS ENDED JANUARY 31,

2017

2016

% Change

US GAAP

Adjustments

Adjusted

US GAAP

Adjustments

Adjusted

US GAAP

Adjusted excl. FX

Revenue

$

1,266,329

-

1,266,329

1,292,736

-

1,292,736

-2

%

1

%

Costs and Expenses

Cost of Sales

341,457

-

341,457

356,357

-

356,357

-4

%

-1

%

Operating and Administrative (B)

729,775

(8,842

)

720,933

733,503

-

733,503

-1

%

1

%

Restructuring Charges (A)

15,045

(15,045

)

-

20,832

(20,832

)

-

Amortization of Intangibles

37,321

-

37,321

37,251

-

37,251

0

%

5

%

Total Costs and Expenses

1,123,598

(23,887

)

1,099,711

1,147,943

(20,832

)

1,127,111

-2

%

0

%

Operating Income

142,731

23,887

166,618

144,793

20,832

165,625

-1

%

3

%

Operating Margin

11.3

%

-

13.2

%

11.2

%

-

12.8

%

Interest Expense

(13,362

)

-

(13,362

)

(12,487

)

-

(12,487

)

7

%

7

%

Foreign Exchange Gain

1,979

-

1,979

1,389

-

1,389

Interest Income and Other

1,365

-

1,365

2,094

-

2,094

-35

%

-34

%

Income Before Taxes

132,713

23,887

156,600

135,789

20,832

156,621

-2

%

3

%

Provision for Income Taxes (C,D)

65,745

(36,244

)

29,501

24,214

12,767

36,981

172

%

-17

%

Net Income

$

66,968

60,131

127,099

111,575

8,065

119,640

-40

%

9

%

Earnings Per Share- Diluted

$

1.15

1.03

2.18

1.90

0.14

2.04

-39

%

9

%

Average Shares - Diluted

58,181

58,181

58,181

58,711

58,711

58,711

See the accompanying Notes to Unaudited Financial Statements for
a description of each Adjustment.

JOHN WILEY & SONS, INC.

FOR THE THIRD QUARTER AND NINE MONTHS ENDED

JANUARY 31, 2017 AND 2016

RECONCILIATION OF US GAAP TO ADJUSTED EPS
- DILUTED (UNAUDITED)

Third Quarter Ended

Nine Months Ended

JANUARY 31,

JANUARY 31,

2017

2016

2017

2016

US GAAP Earnings Per Share - Diluted

$

0.82

$

0.61

$

1.15

$

1.90

Adjusted to exclude the following:

Restructuring Charges (A)

0.10

0.16

0.17

0.24

One-time - Pension Settlement (B)

-

-

0.09

-

Unfavorable Tax Settlement (C)

-

-

0.82

-

Deferred Income Tax Benefit on UK Rate Change (D)

-

(0.10

)

(0.04

)

(0.10

)

Adjusted Earnings Per Share - Diluted

$

0.92

$

0.67

$

2.18

$

2.04

NOTES TO UNAUDITED FINANCIAL STATEMENTS

Adjustments:

A

Restructuring Charges: The adjusted results for the three and
nine months ended January 31, 2017 exclude restructuring charges
related to the Company's Restructuring and Reinvestment Program of
$9.1 million or $0.10 per share, and $15.0 million or $0.17 per
share, respectively. The adjusted results for the three and nine
months ended January 31, 2016 exclude restructuring charges of $13.7
million or $0.16 per share and $20.8 million or $0.24 per share,
respectively.

B

In fiscal year 2017, the Company announced a voluntary,
limited-time opportunity for terminated vested employees who were
participants in the U.S. defined benefit retirement plan to elect
a single lump sum payment of accumulated benefits. The aggregate
amount of payments made under this one time election was $28.3
million. The total charge, recorded in the second quarter of
fiscal year 2017, including a prorata portion of the unamortized
net actuarial loss was $8.8 million or $0.09 per share.

C

As previously disclosed and as reported in the Company's SEC
filings, the Company was appealing an unfavorable tax ruling in
Germany related to tax benefits obtained through an increase in
the tax deductible basis of certain merged German subsidiaries. In
September 2016, the German Federal Fiscal Court issued an
unfavorable final judgement in Wiley's longstanding tax appeal. As
a consequence, the Company reported a $47.5 million charge, or
$0.82 per share in the second quarter of fiscal year 2017.

D

Deferred Income Tax Benefit on UK Rate Change: The adjusted
results exclude deferred tax benefits of $2.6 million, or $0.04 per
share, for the nine months ended January 31, 2017, and $5.9 million,
or $0.10 per share for both the three and nine months ended January
31, 2016. The benefits in these periods are associated with changes
in tax legislation enacted in the United Kingdom which reduced the
U.K. corporate income tax rates. The benefits reflect the
remeasurement of the Company's deferred tax balances to the new
income tax rates and had no current cash tax impact. The fiscal year
2016 legislation reduced the U.K. income tax rates to 19% effective
April 1, 2017 and 18% effective April 1, 2020, and the fiscal year
2017 legislation further reduced the April 1, 2020 statutory income
tax rate to 17%.

Non-GAAP Financial Measures:

In addition to providing financial results in accordance with
GAAP, the Company has provided adjusted financial results that
exclude the impact of other nonrecurring items described in more
detail throughout this press release. These non-GAAP financial
measures are labeled as "Adjusted" and are used for evaluating the
results of operations for internal purposes. These non-GAAP measures
are not intended to replace the presentation of financial results in
accordance with GAAP. Rather, the Company believes the exclusion of
such items provides additional information to investors to
facilitate the comparison of past and present operations. Unless
otherwise noted, adjusted amounts in the attached schedules include
foreign exchange.

JOHN WILEY & SONS, INC.

UNAUDITED SEGMENT RESULTS

FOR THE THIRD QUARTER AND NINE MONTHS ENDED

JANUARY 31, 2017 AND 2016

(in thousands)

THIRD QUARTER ENDED JANUARY 31,

2017

2016

% Change

US GAAP

Adjustments (A,B)

Adjusted

US GAAP

Adjustments (A,B)

Adjusted

US GAAP

Adjusted excl. FX

Revenue

Research

$

205,769

-

205,769

183,568

-

183,568

12

%

17

%

Publishing

171,440

-

171,440

200,645

-

200,645

-15

%

-13

%

Solutions

59,247

-

59,247

52,180

-

52,180

14

%

14

%

Total

$

436,456

-

436,456

436,393

-

436,393

0

%

3

%

Direct Contribution to Profit

Research

$

89,182

517

89,699

74,876

2,497

77,373

19

%

19

%

Publishing

78,444

1,027

79,471

92,602

4,121

96,723

-15

%

-16

%

Solutions

12,427

1,095

13,522

9,995

245

10,240

24

%

32

%

Total

$

180,053

2,639

182,692

177,473

6,863

184,336

1

%

1

%

Contribution to Profit (After Allocated
Shared Services

and Admin. Costs)

Research

$

52,508

517

53,025

43,944

2,497

46,441

19

%

17

%

Publishing

38,807

1,027

39,834

47,200

4,121

51,321

-18

%

-21

%

Solutions

3,591

1,095

4,686

1,751

245

1,996

105

%

137

%

Total

$

94,906

2,639

97,545

92,895

6,863

99,758

2

%

0

%

Unallocated Shared Services and Admin. Costs

(43,746

)

6,479

(37,267

)

(53,276

)

6,850

(46,426

)

-18

%

-16

%

Operating Income

$

51,160

9,118

60,278

39,619

13,713

53,332

29

%

14

%

Total Shared Services and Admin. Costs by
Function

Distribution and Operation Services

$

(23,415

)

5,185

(18,230

)

(22,430

)

2,355

(20,075

)

4

%

-5

%

Technology and Content Management

(62,464

)

(71

)

(62,535

)

(69,633

)

2,670

(66,963

)

-10

%

-5

%

Finance

(11,163

)

50

(11,113

)

(14,208

)

2,740

(11,468

)

-21

%

-1

%

Other Administration

(31,851

)

1,315

(30,536

)

(31,583

)

(915

)

(32,498

)

1

%

-4

%

Total

$

(128,893

)

6,479

(122,414

)

(137,854

)

6,850

(131,004

)

-7

%

-4

%

NINE MONTHS ENDED JANUARY 31,

2017

2016

% Change

US GAAP

Adjustments (A,B)

Adjusted

US GAAP

Adjustments (A,B)

Adjusted

US GAAP

Adjusted excl. FX

Revenue

Research

$

618,987

-

618,987

595,932

-

595,932

4

%

8

%

Publishing

479,701

-

479,701

548,656

-

548,656

-13

%

-11

%

Solutions

167,641

-

167,641

148,148

-

148,148

13

%

13

%

Total

$

1,266,329

-

1,266,329

1,292,736

-

1,292,736

-2

%

1

%

Direct Contribution to Profit

Research

$

284,908

677

285,585

269,615

3,363

272,978

6

%

8

%

Publishing

214,454

1,596

216,050

242,620

4,380

247,000

-12

%

-11

%

Solutions

34,862

1,619

36,481

24,854

385

25,239

40

%

44

%

Total

$

534,224

3,892

538,116

537,089

8,128

545,217

-1

%

1

%

Contribution to Profit (After Allocated
Shared Services

and Admin. Costs)

Research

$

173,235

677

173,912

171,357

3,363

174,720

1

%

4

%

Publishing

94,639

1,596

96,235

111,345

4,380

115,725

-15

%

-15

%

Solutions

9,097

1,619

10,716

160

385

545

Total

$

276,971

3,892

280,863

282,862

8,128

290,990

-2

%

0

%

Unallocated Shared Services and Admin. Costs

(134,240

)

19,995

(114,245

)

(138,069

)

12,704

(125,365

)

-3

%

-5

%

Operating Income

$

142,731

23,887

166,618

144,793

20,832

165,625

-1

%

3

%

Total Shared Services and Admin. Costs by
Function

Distribution and Operation Services

$

(66,720

)

9,781

(56,939

)

(64,259

)

4,320

(59,939

)

4

%

-1

%

Technology and Content Management

(201,420

)

1,662

(199,758

)

(194,022

)

3,443

(190,579

)

4

%

7

%

Finance

(34,318

)

(296

)

(34,614

)

(37,093

)

2,315

(34,778

)

-7

%

2

%

One-time Pension Settlement

(8,842

)

8,842

-

-

-

-

Other Administration

(80,193

)

6

(80,187

)

(96,922

)

2,626

(94,296

)

-17

%

-13

%

Total

$

(391,493

)

19,995

(371,498

)

(392,296

)

12,704

(379,592

)

0

%

0

%

(A) See the accompanying Notes to Unaudited Financial Statements
for a description of the Adjustment.

UNAUDITED ADJUSTED CONTRIBUTION TO PROFIT

INCLUDING ALLOCATED SHARED SERVICES AND ADMINISTRATIVE COSTS

FOR THE THIRD QUARTER AND NINE MONTHS ENDED

JANUARY 31, 2017 AND 2016

(in thousands)

Third Quarter Ended

Nine Months Ended

January 31,

January 31,

2017

2016

% Change

% Change excl. FX

2017

2016

% Change

% Change excl. FX

Research:

Direct Contribution to Profit

$

89,182

74,876

19

%

22

%

$

284,908

269,615

6

%

9

%

Restructuring Charges (A)

517

2,497

677

3,363

Adjusted Direct Contribution to Profit

89,699

77,373

16

%

19

%

285,585

272,978

5

%

8

%

Allocated Shared Services and Admin. Costs:

(36,674

)

(30,932

)

19

%

21

%

(111,673

)

(98,258

)

14

%

16

%

Adjusted Contribution to Profit (after allocated

$

53,025

46,441

14

%

17

%

$

173,912

174,720

0

%

4

%

Shared Services and Admin. Costs)

Publishing:

Direct Contribution to Profit

$

78,444

92,602

-15

%

-14

%

$

214,454

242,620

-12

%

-10

%

Restructuring Charges (A)

1,027

4,121

1,596

4,380

Adjusted Direct Contribution to Profit

79,471

96,723

-18

%

-16

%

216,050

247,000

-13

%

-11

%

Allocated Shared Services and Admin. Costs:

(39,637

)

(45,402

)

-13

%

-11

%

(119,815

)

(131,275

)

-9

%

-7

%

Adjusted Contribution to Profit (after allocated

$

39,834

51,321

-22

%

-21

%

$

96,235

115,725

-17

%

-15

%

Shared Services and Admin. Costs)

Solutions:

Direct Contribution to Profit

$

12,427

9,995

24

%

25

%

$

34,862

24,854

40

%

40

%

Restructuring Charges (A)

1,095

245

1,619

385

Adjusted Direct Contribution to Profit

13,522

10,240

32

%

32

%

36,481

25,239

45

%

44

%

Allocated Shared Services and Admin. Costs:

(8,836

)

(8,244

)

7

%

7

%

(25,765

)

(24,694

)

4

%

4

%

Adjusted Contribution to Profit (after allocated

$

4,686

1,996

135

%

137

%

$

10,716

545

Shared Services and Admin. Costs)

Total Adjusted Contribution to Profit (after

$

97,545

99,758

-2

%

0

%

$

280,863

290,990

-3

%

0

%

allocated Shared Services and Admin. Costs)

Unallocated Shared Services and Admin.
Costs:

Unallocated Shared Services and Admin. Costs

$

(43,746

)

(53,276

)

-18

%

-15

%

$

(134,240

)

(138,069

)

-3

%

0

%

Restructuring Charges (A)

6,479

6,850

11,153

12,704

One-time - Pension Settlement (B)

-

-

8,842

-

Adjusted Unallocated Shared Services and Admin. Costs

$

(37,267

)

(46,426

)

-20

%

-16

%

$

(114,245

)

(125,365

)

-9

%

-5

%

Adjusted Operating Income

$

60,278

53,332

13

%

14

%

$

166,618

165,625

1

%

3

%

(A) See the accompanying Notes to Unaudited Financial Statements
for a description of the Adjustment.

JOHN WILEY & SONS, INC.

SEGMENT REVENUE by PRODUCT/SERVICE

FOR THE THIRD QUARTER AND NINE MONTHS ENDED

JANUARY 31, 2017 AND 2016

(in thousands)

Third Quarter

Nine Months

Ended January 31,

% of

% Change

Ended January 31,

% of

% Change

2017

2016

Revenue

excl. FX

2017

2016

Revenue

excl. FX

RESEARCH

Journal Revenue

Journal Subscriptions

$

149,909

125,669

73%

23%

$

472,401

450,970

76%

9%

Author-Funded Access

6,915

6,429

3%

15%

21,851

18,301

4%

27%

Licensing, Reprints, Backfiles, and Other

40,983

51,470

20%

-14%

114,295

126,661

18%

-5%

Total Journal Revenue

197,807

183,568

96%

12%

608,547

595,932

98%

6%

Platform Services (Atypon)

7,962

-

4%

10,440

-

2%

Total Revenue

$

205,769

#

183,568

100%

17%

$

618,987

595,932

100%

8%

Publishing

STM and Professional Books

$

76,899

90,830

45%

-12%

$

215,734

251,742

45%

-12%

Education Books

50,343

69,502

29%

-27%

162,669

203,333

34%

-19%

Total Books and Reference Material

127,242

160,332

74%

-18%

378,403

455,075

79%

-15%

Course Workflow (WileyPLUS)

23,464

21,894

14%

7%

44,170

41,359

9%

7%

Online Test Preparation and Certification

8,508

6,627

5%

29%

25,585

21,472

5%

20%

Licensing, Distribution, Advertising and Other

12,226

11,792

7%

7%

31,543

30,750

7%

6%

Total Revenue

$

171,440

200,645

100%

-13%

$

479,701

548,656

100%

-11%

Solutions

Online Program Management

30,016

26,057

51%

15%

81,195

69,754

48%

16%

Professional Assessment

13,783

13,162

23%

5%

43,451

42,196

26%

3%

Corporate Learning

15,448

12,961

26%

20%

42,995

36,198

26%

19%

Total Revenue

$

59,247

52,180

100%

14%

$

167,641

148,148

100%

13%

Total

$

436,456

436,393

3%

$

1,266,329

1,292,736

1%

JOHN WILEY & SONS, INC.

UNAUDITED STATEMENTS OF FINANCIAL POSITION

(in thousands)

January 31,

April 30,

2017

2016

2016

Current Assets

Cash & cash equivalents

$

482,321

535,859

363,806

Accounts receivable

220,845

235,806

167,638

Inventories

49,247

53,747

57,779

Prepaid and other

124,058

71,529

81,456

Total Current Assets

876,471

896,941

670,679

Product Development Assets

90,267

73,906

72,126

Technology, Property and Equipment

241,385

207,515

214,770

Intangible Assets

834,252

872,224

877,007

Goodwill

981,453

938,796

951,663

Income Tax Deposits

-

59,591

62,912

Other Assets

79,210

65,435

71,939

Total Assets

3,103,038

3,114,408

2,921,096

Current Liabilities

Short-term debt

-

150,000

-

Accounts and royalties payable

210,853

205,724

166,222

Deferred revenue

403,269

305,541

426,489

Accrued employment costs

83,276

82,400

97,902

Accrued income taxes

9,084

10,023

9,450

Accrued pension liability

5,458

4,590

5,492

Other accrued liabilities

78,094

68,658

76,252

Total Current Liabilities

790,034

826,936

781,807

Long-Term Debt

865,700

814,728

605,007

Accrued Pension Liability

178,023

185,976

224,170

Deferred Income Tax Liabilities

182,571

192,220

189,868

Other Long-Term Liabilities

75,250

78,465

83,138

Shareholders' Equity

1,011,460

1,016,083

1,037,106

Total Liabilities & Shareholders' Equity

$

3,103,038

3,114,408

2,921,096

JOHN WILEY & SONS, INC.

UNAUDITED STATEMENTS OF FREE CASH FLOW *

(in thousands)

Nine Months Ended

January 31,

2017

2016

Operating Activities:

Net income

$

66,968

111,575

Amortization of intangibles

37,321

37,251

Amortization of composition costs

29,502

30,047

Depreciation of technology, property and equipment

50,520

50,820

Restructuring charges

15,045

20,832

Restructuring payments

(15,740

)

(24,809

)

Deferred tax benefit on UK Corporate Income Tax Rate Change

(2,575

)

(5,859

)

Unfavorable Tax Settlement

47,531

-

One-time pension settlement

8,842

-

Share-based compensation expense

10,187

12,292

Excess tax benefits from share-based compensation

(227

)

(517

)

Royalty advances

(79,804

)

(79,026

)

Earned royalty advances

77,554

71,761

Other non-cash charges and credits

26,096

15,492

Change in deferred revenue

(7,733

)

(57,959

)

Net change in operating assets and liabilities

(34,335

)

(65,289

)

Cash Provided by Operating Activities

229,152

116,611

Investments in organic growth:

Additions to technology, property and equipment

(82,257

)

(69,048

)

Composition spending

(27,369

)

(28,627

)

*

Free Cash Flow less Composition Spending

119,526

18,936

Other Investing and Financing Activities:

Acquisitions, net of cash

(152,110

)

(17,972

)

Repayment of long-term debt

(340,207

)

(158,861

)

Borrowings of short-term debt

-

50,000

Borrowings of long-term debt

600,900

323,500

Change in book overdrafts

(8,866

)

(3,287

)

Cash dividends

(53,638

)

(52,612

)

Purchase of treasury shares

(35,362

)

(59,704

)

Proceeds from exercise of stock options and other

16,444

556

Excess tax benefits from share-based compensation

227

517

Cash Provided by Investing and Financing Activities

27,388

82,137

Effects of Exchange Rate Changes on Cash

(28,399

)

(22,655

)

Increase in Cash and Cash Equivalents for Period

$

118,515

78,418

RECONCILIATION TO GAAP PRESENTATION

Investing Activities:

Additions to technology, property and equipment

$

(82,257

)

(69,048

)

Composition spending

(27,369

)

(28,627

)

Acquisitions, net of cash

(152,110

)

(17,972

)

Cash Used for Investing Activities

$

(261,736

)

(115,647

)

Financing Activities:

Cash Used for Investing and Financing Activities

$

27,388

82,137

Excluding:

Acquisitions, net of cash

(152,110

)

(17,972

)

Cash Provided by Financing Activities

$

179,498

100,109

Free Cash Flow less Composition Spending:

The Company provides financial measures referred to as “Free Cash
Flow less Composition Spending”. Free Cash Flow less Composition
Spending is defined as “cash flow from operating activities, less
composition and other capital spending”. Management believes this
metric provides additional information to investors to facilitate
the comparison of past and present results. This metric is also used
internally by management in evaluating results. This non-GAAP
measure is not intended to replace the financial results reported in
accordance with US Generally Accepted Accounting Principles.